Law Office of Allan E. Dunaway, PLC

Non-bankruptcy workout plans: what are they?

One of the most difficult aspects of being in a situation where your debt burden has become unmanageable is that it can lead you to a sense of desperation. People seldom make their best decisions when they feel desperate, and few things can make you feel that way more than being overburdened with debt.

Filing a personal bankruptcy petition is one way to get out of a seemingly desperate debt situation. But it is not a measure that you should resort to in haste. Aside from having serious financial consequences that can last for years, bankruptcy is also not necessarily the only option available to you. Another debt relief option to consider is to explore a workout plan with your creditors.

A workout plan is a voluntary arrangement between you and your creditors. Under the plan, you negotiate for more favorable debt terms in exchange for not declaring bankruptcy. The workout plan terms may include any or all of reduced interest, reduced payments, a longer repayment period or a reduced overall payment obligation.

For debtors, the advantages of a workout plan include avoiding bankruptcy while simultaneously reducing debt and interest obligations. Although a workout plan may not at first blush seem to offer much to creditors, they will nonetheless often view such an arrangement as being preferable to the debtor declaring bankruptcy. Creditors can recover more of what they are owed, even if it is not the full amount.

A workout plan may not work in every debt scenario. It is an agreed-upon arrangement, and like any contract it requires the consent of all concerned. Accordingly, it may be helpful to work with a Kentucky bankruptcy law firm to help negotiate the terms and to structure the workout plan to avoid unintended consequences, while still offering both you and your creditors a way forward other than bankruptcy.

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For sound bankruptcy advice you can count on, from a skilled lawyer who truly cares about your future, contact the Louisville Law Office of Allan E. Dunaway, PLC. We have two convenient locations: Louisville, Kentucky, and Jeffersonville, Indiana. Our main office in Louisville is located off the beaten path so you won't have to deal with downtown traffic and can pull right up to our door and walk right in.

Call us at 502-785-1005, or send an email message. Our law firm welcomes the opportunity to serve you in any way we can.

If for some reason personal bankruptcy is not for you, if you do not qualify for the Chapter 7 approach via the "means test" and Chapter 13 reorganization is not the answer, Allan E. Dunaway works hard to inform you of other appropriate means of debt settlement that suits your unique needs.

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